Finance Exam 2 Practice (FIN3403)

How much money do you need to place into a bank account which pays a 6% annual rate in order to have $500 at the end of 7 years?

• $332.53

• $629.52

• $751.82

• $463.77

• $333.17

How much money would you need to place in an account to have $1,000 10 years from today? Assume the account pays 8.5% and it is compounded monthly. Round to the nearest $1.

• $893

• $833

• $429

• $932

• $442

Columbia Corporation deposited $2,000 in an account that pays 12% interest annually. If the interest is compounded continuously, how much money will be in the account at the end of 20 years?

• $19,293

• $22,046

• $22,553

• $22,704

• $22,900

Which of the following provides the greatest annual return?

• 16% compounded quarterly

• 15% compounded continuously

• 15.2% compounded daily

• 16% compounded annually

If you borrow $25,000 from a local finance company and you are required to pay $4,424.50 per year for 10 years, what is the annual interest rate on the loan?

• 12%

• 18.9%

• 15.9%

• 13.6%

• 14.4%

How much do you have to deposit today so that you can withdraw $50,000 a year at the end of years 5 through 9, and $25,000 at the end of year 10? Assume that you can earn an annual rate of 8 percent.

• $170,983

• $146,591

• $146,737

• $158,318

• $159,243

If you want to have $875 in 36 months, how much money must you put in a savings account today? Assume that the savings account pays 16% and it is compounded quarterly. Round to the nearest $1.

• $213

• $147

• $543

• $547

• $746

You just purchased a parcel of land for $10,000. If you expect a 12 percent annual rate of return on your investment, how much will you sell the land for in 10 years?

• $25,000

• $31,058

• $31,384

• $34,310

• $38,720

Amax Inc. deposited $2,000 in a bank account that pays 12% interest annually. How much money will be in the account after 4 years?

• $2,525

• $2,800

• $3,111

• $3,100

• $3,147

Your grandmother deposited $100 in a savings account for you 25 years ago. The money has been earning an annual rate of 12% interest, compounded quarterly. How much money is now in the account?

• $209

• $4,165

• $1,700

• $5,051

• $1,922